China's Liansu opens joint venture plant in Ontario

FOSHAN, CHINA (Oct. 10, 1:40 p.m. ET) — China’s Liansu Group, the country’s largest plastic pipe maker, has opened a small joint venture assembly and production plant in Vaughan, Ontario, its first outside its home market, to supply window and door products to the North American market.

Liansu, based in Foshan, Guangdong province, owns 65 percent of the Canadian joint venture, called Skyreach L&S Extrusions Corp., with the remainder owned by Skyreach President Saylor Huang and his family, a Liansu spokesman said.

The 50,000 square foot facility, which employs 50, has only recently started operation and will focus mainly on assembling window and door products imported from Liansu’s operations in China, although it may have one or two extrusion lines, the spokesman said.

“It’s just really a small assembly factory,” the spokesman said. “At the moment we think it may be a stepping stone to building up the overseas markets.”

The vast majority of the company’s sales, however, are in China. The spokesman said 99 percent of the company’s revenues come from the China market, and the North American operation is only a part of its overseas sales.

Liansu is using the Skyreach brand name in North America. It manufactures its Skyreach products at factories in Changchun, Jilin province, and at one of several facilities near its Guangdong province headquarters, the spokesman said.

The company, which is publicly-traded on the Hong Kong stock market, has more than a dozen factories employing 7,000 people in China.

In August it announced plans to add four additional factories in the country. The spokesman said it would invest up to 800 million Chinese yuan (US$127.5 million) in each of the next two years as part of that expansion.

Liansu uses German-made equipment, rather than its own-brand Liansu extruders, to make the Skyreach products, the spokesman said.

Liansu attracted significant attention in the North American market in 2007 when it announced plans to begin selling some small plastic pipe and related products in the United States and Canada, but it later backed away from those plans.

It said earlier this year that it was starting a unit to make window and door products, broadening beyond its base in pipe products.